Groupon fails to turn a profit

While Groupon Inc.’s revenue grew 29.7% in the fourth quarter compared to the same period in 2011, the daily deal operator failed to turn a profit. Groupon today announced an operating loss of $12.9 million in the fourth quarter and a net loss of $81.1 million. For the full year Groupon posted a net loss of $67.4 million.

The company had reported positive operating income for the first three quarters of 2012. But a combination of smaller margins from its offers, weak international sales and stock-based compensation ate into those profits.

One bright spot for the daily deal operator was its Groupon Goods business, which generated $454.7 million in revenue last year, compared to $20.8 million in 2011. Groupon Goods launched in September 2011.

For the fourth quarter ended Dec. 31, Groupon reported:

• Revenue increased 29.7% to $638.3 million, compared with $492.2 million in 2011.

• North American revenue of $375.4 million, a 109.0% jump from $179.6 million a year earlier.

Groupon CEO Andrew Mason says that despite the operating loss in the fourth quarter, the daily deal operator intends to spend money to grow its business. "We will continue to invest in growth through 2013 as we see new opportunities to give our customers what they want,” he says.

Groupon forecast a potential operating loss in the first quarter, saying its operating results will range between a $10 million loss and a $10 million profit.